The questions we aim to answer are:

1. How will climate change impact material assets?
2. What physical and transition climate risks should different actors incorporate on their risk register?
3. How can valuation methods incorporate cascading and simultaneous climate risks?
4. What is the potential value of the portfolios of different actors were climate risk to be incorporated in the valuation method?

Climate risks can be either physical or transitional and these risks impact on banks, and financial institutions, either directly through the valuation of assets, liabilities and cost of capital, lower corporate profitability, or indirectly, through macro-financial changes. Material assets are valuable. Close to one in five large cap companies listed on the NASDAQ OMS Stockholm market operate in real estate.

This project engages 2 research organisations (SEI and the Sustainable Finance Lab at KTH) and 14 consortium partners (financial institutions; asset owners; insurance companies; and government agencies). The main expected output is an evidence-based climate risk evaluation method for improved decisions and assessment of the value of material assets, incorporating actors’ heterogeneity but also cascading climate related impacts.

Partners

• Swedbank
• Belfius Bank
• Allianz Global Insurance
• AFA Fastigheter
• Alecta Fastigheter
• Castellum
• Skandia Fastigheter
• Vasakronan
• CBRE
• JLL
• SveFA
• The Swedish Meteorological and Hydrological Institute (SMHI)
• The Viable Cities Strategic Innovation Programme
• TU Delft Real Estate Development and Building in Low Urban Environments initiative
• KTH